Analysis & Opinion

HONG KONG Aug 28 (Reuters) - The world's largest chemicals
maker BASF said its business in China is stagnating
because industrial customers continue to run down their
inventories amid economic uncertainty.

"If you have a little bit of destocking which is currently
the case you can bring demand (to) a zero growth rate," BASF
co-Chief Executive told Reuters Insider TV on Tuesday.

"That is what customers do at the moment. They are more
cautious," he said, adding that long-term investment plans IN
China remained unchanged.

Volume in China, which accounts for about half of its Asian
business, was flat in the first six month of the year, he said.

BASF, whose products range from catalytic converters and car
coatings to insulation foams, said in July it was suffering as a
result of a slowdown in China, its main growth market. Chinese
economic growth could remain subdued until the end of the year,
it warned.

Asked whether the ousting of Chinese Politburo member Bo
Xilai was a concern, he said China has a record of seamless
changes in leadership.

The downfall of provincial leader Bo earlier this year
exposed rifts in China's leading party.

"The Bo Xilai case showed that there is something behind the
curtain, but on the other hand we have seen all the transitions
of leadership going smoothly and I actually also expect that in
October this shift will (go) smoothly," Brudermueller said.

"And I think there is no alternative for (China) to opening
up even more and integrating into the world economy."
(Reporting by Tara Joseph; Writing by Ludwig Burger)